The Hindu Business Line : New Enterprise to invest $125 m in SMEs

The company's general partner, Mr Mark W. Perry told Business Line, "We are interested in India's technology, healthcare and energy sectors." The funds for investing into Indian start-up ventures would come from the $2.5-billion that NEA had raised recently. Of this, at least $250 million was earmarked to both India and China, Mr Perry said. The investments into India would be made over a three-year period, he said.

New projects

At present, NEA has funds under management of about $9.5 billion worldwide. It invests in at least 25 new projects worldwide per year. "We hope to make at least two investments in India in the coming years," Mr Perry said. Discussions were under way with some of the companies, he said. These included healthcare companies.

"By 2007, we hope to make a commitment," he added. Besides, NEA was also looking for second rung investments in India through buy outs from exiting venture capitalists. Discussions, he said, on such a deal was under way though no names were revealed.

NEA already holds 20 per cent stake in the Indo US venture fund floated by Vinod Dham and Vani Kola, which have a corpus of $150 million. NEA's current investments in the country include in companies such as Nevis Network in Pune, a security chipmaker and telecom software producer Sasken Communications Ltd. In Sasken, NEA has a 5 per cent stake. However, he said, there was no move to exit from Sasken. In telecom verticals, NEA has invested in Telcima, a telecom equipment maker.

In all these investments, Mr Perry said that NEA would look for returns consistent with what it was earning globally. At present, he said, NEA earned a 30 per cent internal rate of return on its investments in start up companies, after incubation and eventual exit, either through an initial public offering or through a merger/acquisition. However, the NEA, he clarified was not a financial investor. "We are growth investor and prefer staying on with the company for a long period of time, right through its growth phase."